What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The co-op will take a disruptive approach where organisations or ideas we may never have considered come to the fore to drive change, she says.
“That is through a combination of providing support to our farmers to shift the base, working with others on collaborative solutions at catchment, regional, national and international level and investing in science innovation to develop the next generation outcomes,” she told the Environmental Defence Society conference in Auckland.
“It will take collaboration, whether that is through technological solutions or catchment care groups. It will not happen through ad hoc solitary efforts.
“It will take a systems approach where we think about a problem end-to-end across all aspects of the problem -- the environmental, social and economic, the intellectual and emotional, the future and the immediate.”
Mortland says farmers need certainty on what our environmental limits are and a vision of what we are heading towards.
“Empower and celebrate leadership from any quarter and work together seeking solutions from obvious and unusual partners. This is the generation to do it and now is the time to act.”
Earlier she said Fonterra had been discussing the future a lot.
“We think the future is exciting and will bring challenges for our industry and for dairy farmers,” she says.
“We are entering a world that has an exponentially growing demand for nutrition – good food that will meet the dual global challenge of obesity and malnutrition. That food may look and feel different. It may be produced by different methods by different players and in different places.
“But we will need to meet this nutrition demand from a natural system, one way or another, and that system is reaching, and for some elements as we know has exceeded, the planetary boundaries.
“We need to do this in a world that has got suddenly very small: global consumers can connect with local communities with the click of a button; people will pay for a product which makes them feel safe or good or both; reputations can be made or destroyed in 24 hours; and youth of today do not think profit at the expense of our planet is okay.”
Mortland says it is an uncertain but exciting future because the world needs food and New Zealand knows how to make good food.
“We know how to look after pasture, crops and animals and we have extremely innovative farmers and people. And we come from an economy in a developed part of the world which means we are best placed to adapt to the new world.
“Our challenge is to make that food while sticking to environmental limits, and in fact while replenishing the environment… that’s the only way we will ensure our ability to produce food and enjoy our country for many generations.
“The challenge is ours now because although there is an exciting future, it is this generation that has to create the enablers for this to happen. We could have done it earlier, we can’t do it later.”
Mortland says certainty is needed on environmental limits, whether that’s water quality or biodiversity loss or greenhouse gas emissions.
“We’ve got to throw our efforts into robust science-based analysis and difficult discussions and figure out the mechanisms to put a stake in the ground.
“Things will always evolve as the science gets better. But we need to understand what our boundaries are and start to quantify the size of the gap.
“We are seeing this right now with water quality. We are in the midst of debates on the methods of determining environmental limits, whose standard is right, how it is determined and who has a better idea.
“It is not easy but we are on a critical path in this journey which is to seek to understand those environmental limits, the causes of the degradation and put in place the mechanisms, regulatory, market and social, to address them.”
Leadership is needed from known and unknown quarters.
“We are a change journey as a country and as a planet. It will take some vision and determination.
“There are some obvious candidates to lead. We’ve done a lot of looking to the Government. We are asking businesses to act beyond their own interests for the greater good. And speaking honestly on behalf of business, we are only just getting a handle on what that really means.
“We’ve got local heroes – farmers, environmentalists, politicians and community members who have rolled up their sleeves and got on with the job when they can.”
